Rating and Stats

Document Actions

Share or Embed Document

Relaunching brand means thinking beyond a new design or a new name. It means, "going deeper.

"
Written by: PRASHANT SUMEET • In today’s competitive scenario when the firms are fighting for their market share, different marketers looks for different strategy for capturing the same, but at the same time only few succeeded in their goal. In this regard different marketers starts raising questions on possible business strategies and one of them is “ relaunching of product”, it is define as the process, when an existing brand changes or modifies the key elements of the marketing mix without materially changing its target consumer group. Relaunch, typically, would mean that the product, perfume and packaging have been modified or even changed substantially and the change is communicated through media advertising and at the point of sale. Generally a relaunch is made when it is apparent to the marketer that the brand in question is losing share because its physical qualities need a change. It is also possible that, in comparison to competition, the brand is looking tired and old-fashioned, so that this could be a reason to strengthen the brand communication. In addition to making changes to the product, there are many instances of brands of products being re-launched in the market. However there are many issues involved that are unique. The key factors that marketers review in order to decide whether a brand needs a relaunch are a decline in its market share and the brand's strength (when measured through a suitable research methodology) showing a decline. The idea of relaunching a brand when it is still flourishing is a very good one and should be a practice of good business and marketing strategy. Unfortunately, relaunches when a brand is successful are rare. It is more common to push a growing brand up the growth curve by a re-stage rather than a relaunch; particularly if the growth of the brand is threatened or likely to be threatened by major competitors. Very often, an expensive relaunch fails to be successful because it was done in a hurry or the management actually did not take into account market research evidence that the marketing mix was not fully satisfactory. There are not any magic formulae but are guidelines for decisions relating to re-launch of brands. A brand name would definitely be reflective of the position that the brand occupies, it could also be an extension of an existing brand. At the same time catering to different product categories that could be defined as emotional, rational, and so on. Then again, it could be the re-launch of an existing brand in order to make the consumer look at the product in a different light. However, we also question whether the only motive of re-launching of a brand would be to reposition or would it imply more? The motives for different firms are seemed to be entirely different; but some times the positioning of the product has not changed. The questions that arise out of the discussions so far are;

•

He is a final year student in IIM Calcutta ( 2001-2003)

1. Why does a company decide to revive an old brand name? 2. What are the advantages and disadvantages of doing the same? 3. If a company decides to do so, how can it make it successful? We shall try and address these questions sequentially, in this paper with references of situations from the Indian scenario. Re-launching of a brand cannot be defined in an objective manner because of the fact that it can mean so many things at one time, in general, it can be said to be any one or a combination of some or even all of the following: 1. Bringing back a brand name for the same product, a different product, 2. Positioning the brand in the same way as before, in a different way than that was before. Other than these, there have also been situations where a brand had been taken over by a competitor for a period of time and then bought back by the original company. In this case, depending upon how long the brand name had been in possession of the competitor, the strategy for re-launch would be different. There might be numerous reasons for a company to re-launch a brand. Nestle is planning to re-launch Maggi in its original taste. The new ad campaign's refrain is `Ab sub kuch pehle jaisa'. Nestle's campaign has been necessitated, they claim, as in the recent past, Maggi has lost some market share to competition in noodles. Now, Maggi is a formidable brand; this has been proved time and again, even after the launch of Top Ramen. What Nestle is doing is leveraging the brand name and all associations of the brand name to lure customers of Maggi, who left it for Top Ramen.Unlike Maggi, Binaca is a brand that existed only in yesteryears. The most remembered thing about Binaca is its conversion to Cibaca. So, why is the company re-launching Binaca and not Cibaca? Cibaca changed the brand name Binaca to Cibaca when it was sold to another company. While Dabur bought Binaca, Colgate Palmolive bought Cibaca. Dabur has launched Binaca and now we have both Binaca and Cibaca in the market. (Though Binaca was toothpaste and Cibaca is currently being sold only as a toothbrush.) This example illustrates the reason for re-launch as being done for competitive reasons. In general, it can be said that a brand is re-launched to leverage on past brand equity. This is, however, a very general explanation. Each situation warrants a different reason. We have identified some causes for brand re-launch. Most of the brand re-launches fall in one of the following categories. Repositioning of the brand. Changed market conditions. Saving on costs of a new brand launch. Entering a new market. Most products follow a sort of life cycle, brands behave likewise. From the launch they grow rapidly, then level off as they reach maturity; after a time, they begin a slow decline which becomes more rapid as they reach obsolescence. Profits follow the same pattern, after a suitable lag. In general, sales growth is easier in the growth stages of the market. However, these stages

are characterized by intensive competitive entry and profits may be hard to earn. In mature markets, brand positions become established and there is normally a shakeout of weaker competitors. Those that survive can earn good profits. Decline can lead to over-capacity and downward pressure on prices and profitless competition. However, the product life cycle can only be used as a rough guide as it is often possible to re-launch a product. A Company find the previous positioning faulty or ineffective, as a result might want to reposition the brand. The condition here will be, of course, the fact that the brand will not have that much of an equity to boast of. In case of a strong brand repositioning itself, the new positioning will make less sense. Chandamama, the yesteryear's children's magazine is coming out with a new look and old feel positioning strategy. The children's magazine that disappeared from newsstands in October 1998 is being re-launched in a new avatar to keep step in a globalize entertainment world. The magazine's trademark has been an illustrated color cover, folk tales from India & abroad , quizzes, profiles and science tit-bits in a variety of languages. The new version promises a contemporary look but the same feel of the orient and the vernacular editions of the magazine. A subtle repositioning in combination with the strength of the brand is what will make the sales move. Launching a new brand involves enormous costs. Cashing in on an old brand will save a good, if not substantial, amount of the initial costs. Marico is extending its SIL brand to soup. SIL has already achieved cult status through the jams sold under the same name. Thus Marico aims to kill two birds with one stone, launch a new product namely soups under the aegis of the same name SIL and to launch an improved version of jams fortified with vitamins and an new packaging. The negative side of this is that the company will have to fight established brand perceptions or will have to be restrained by it. In this example, we find that people associate the name SIL with jams. What actually works in favour of Marico is that Sil has wide recall among people. This will work in two ways; one, it will induce customers to pick the product off the shelves and try it. Secondly, it results in cost savings for the company in terms of not having to take up any "new brand" building efforts. Launching a new brand involves more cross-functional co-ordination than any other stage in product development and accounts for more than 90 percent of the total cost of getting a product to market. Kelvinator India refrigerators has led a yo-yo type life till now. There have been frequent changes of ownership, which also included an 18-month stint with the enemy, Whirlpool. Worldwide, the Electrolux brand owns Kelvinator. During the period 1997-98, when Electrolux was just entering India, it did not have the capacity to hold on to the sales of Kelvinator. It had to sell it to Whirlpool to sustain sales. Whirlpool took advantage of the situation and milked the brand in that time. After the stipulated period of 18 months, Electrolux took it back. Since then, it has been contributing to a steady 65-70% of the company's revenues, a successful re-launches. Electrolux saved on a lot of costs it would have probably incurred had it launched a new brand. Changed market conditions This should not be confused with repositioning the brand. Changed market conditions imply relaunching of a brand on the same positioning plank. A brand might have failed in previous years because the market would not have been suitable for it at that point of time. The current market situation, having become suitable for the product, could warrant a re-launch of the brand. This situation is exemplified in the case of Wipro mentioned earlier. When Wipro launched the brand

Super Genius, the market for PCs was still in the burgeoning stage. The product did not do well for reasons that included the market situation. Now, as the market for PCs is increasing at a very fast rate, there are more chances of the brand to survive and do well. The situation could also have the following facet, that of the need to redefine the target segments. The company might find that its product designed with one customer group in mind is actually serving the needs of a different customer group. This thus lends a new dimension to the problem of re-launching of the brand. Often has it happened that one innovation finds a buyer in an erstwhile latent market. This accords the firm in question a chance to tap a new opportunity. But there are constraints to this, dictated by variables such as diverse cultures, preferences exercised by the people, languages spoken, geographical diversity etc. Thus, a seemingly minor aspect like the name of the product would have to be changed for it may mean something radically different from what it was meant to convey in a particular language. Thus arises the need to re-launch an existing brand in a new market. Escorts are set to re-launch the Rajdoot model of motorcycles, targeted at the rural segment of the market. This shift in the market was necessary as the current targeting and positioning suits Rajdoot's brand image of being a rugged bike. The company will play on the durability and value for money platform. In one way or the other, brands are re-launched, as the company believes that there is enough brand equity in the market. However, an outcry for revival of the brand by customers is not a commonly observed phenomenon. Coca-Cola had to be re-launched as Coke Classic after a huge public outcry when the company decided to change its taste, of other examples that can be mentioned here is the comeback of Arthur Conan Doyle’s famous detective, Sherlock Holmes. (He can be classified as a brand too!) Sherlock Holmes had to be brought back from ‘the dead’, as people could not accept his death. As mentioned before, a customer outcry is not commonly observed. It is also against basic business sense to remove a brand that has a lot of equity. Even if the company is not able to sustain the brand, another company will take over the firm and cash in on the brand equity already present. How can a re-launch be successful? Successful re-launches cannot be generalized into a theory. Over the years, however, there have been certain situations, which have been found to be most conducive for a re-launch. These considerations are basically built up on the brand strength, the associations it has, the difference in the positioning plank, etc. We observed that certain type of brands have a certain cause for relaunching it. Focused brands generally had the reason of repositioning or going into new markets. The reason for this probably lies in the fact that it is easy for them to do so as compared to diversified brands. Diversified brands had the reason of changed market conditions and saving on new brand building costs. It is far easier and more economic to keep the same brand name when the above conditions apply. Hence, we can look for success strategies for re-launching of brands in two different cases, namely, for focused brands and for diversified brands. Court, Leiter and Loch talk about leveraging the brand name according as the company is focussed or diversified. They talk about success strategies, which happen to be very relevant in context of re-launching of brands. Focused brands should own and broaden the category in which they are operating apart from capturing all occasions to drive shareholder value. Diversified brands, on the other hand,

should find a common thread, so to say, between all its products. This thread is essentially the brand identity. And, they should leverage this aggressively. In the context of re-launching, brands should follow the following in order to ensure a successful re-launch. Conflict between the perception of the brand and its current communication in the mind of the prospect should be minimized. Chances for this occurrence are high nonetheless. Brands are relaunched with the intention of improving their sales and this is quite difficult to do if the brand failed earlier on due to its previous positioning. Perceptions are difficult to change, especially if they are formed over a period of time. Hindustan Motors is re-launching its flagship Ambassador targeted at the premium segment of the population who want to have a pristine feeling to their car. Now, an Ambassador signifies a big, bulky automobile with stately looks. To position it as anything other than a vintage car would spell disaster for the company. Repositioning a brand requires the brand to have not a very strong brand image. If the brand has a strong brand image, then, positioning it on another platform will not go down well in the market. People will not be able to relate to the product. There are some pluses and minuses in an old brand name. The plus is the existing brand equity in the market that aids recognition in this over-communicated world. The minus is, not surprisingly, the same fact! A prospect will always view the brand with a pre-conceived notion. He/she will have some expectations from the brand. This restricts the marketer from tampering much with the positioning of the brand. A shrewd marketer will leverage the strength of the brand name and use it to position the re-launched product. It can be said that re-launch is just another marketing exercise that is to be performed routinely but the implications of this are far reaching; on the brand as well as the company.

Re-launch is a strategic decision. Its implications must be studied carefully; whether the brand will retain its relevance in the present scenario or whether the brand still pushes prospects to buy it. These questions can only be answered by studying the brand. This paper does not give a magic formula but only a framework on which taking such decisions will be easier. Finally, here is our opinion on brand relaunch, if done well, in terms of content and execution, they can serve the purpose of strengthening the brand, increase brand sales, brand shares, brand salience and, of course, brand profit. However, a successful relaunch takes management time, good marketing research, skill, significant resources in terms of money and time; and, as always, a bit of luck.